If this recession produces one positive outcome, let's hope that it's some semblance of fiscal responsibility among federal, state, and local governments. Many of them never met a program they didn't like--not just grandiose bridges to nowhere and massive bailout packages, but also thousands of smaller cases of largesse and waste costing many billions of taxpayer dollars.
Consider this relatively small example. The taxpayers of my town recently defeated a $9 million bond proposal to finance synthetic turf fields, concession stands, lighting, bleachers, and other athletic facility upgrades at various schools in our district--then a few months later were forced to defeat a slightly more modest proposal put up for yet another vote. Evidently, school board and other community "leaders" didn't get the message the first time around: Amid the recession, it's not the time to spend on nice-to-haves, even if they're the product of the noblest of intentions. (The first vote, by the way, lost by 39 votes; the second by 550 votes.)
Even as governments forecast record deficits, they can't bear to scale back their ambitions. New York Gov. David Paterson submitted a 2009-2010 budget in December that represents a $1.3 billion increase from last year, even as he aims to close a $15.4 billion budget gap. Among the tougher measures Paterson proposed to balance the state books: a 3.3% reduction in school aid and cuts in payments to hospitals and nursing homes. But the budget proposes only a handful of layoffs and includes scores of spending increases and new taxes. So much for more efficient government.
Even more dawdling is California, where Gov. Arnold Schwarzenegger has proposed an 18-point plan to reduce the state's $40 billion deficit. As my colleague Bob Evans noted in a blog on the subject, eight of the action items Schwarzenegger proposes stand to pare a whopping $1,396,000 in state spending--leaving only $39,998,604,000 more to cut!
Elsewhere on the 18-point list is California's sprawling IT organization, which now spends $3 billion a year and employs up to 10,000 people, 130 of them CIOs. The governor's plan is to cut an average $300 million a year, or 10%, from the state IT budget over the next five years by consolidating four autonomous agencies--the State Chief Information Officer, the Office of Information Security and Privacy Protection's information security operations, the Department of Technology Services, and the Department of General Services' telecommunications division--into one, all under über-CIO Teri Takai. The kicker is that Takai plans to do that consolidation and make those spending cuts without touching head count. So much for making the truly hard decisions.
No layoff or spending reduction is without pain. None is to be taken lightly. But ask yourselves this question as you consider whether governments are doing enough to get their houses in order: Does your organization have the same leeway? Can you get by with only modest modifications as you help your companies free up cash and improve the bottom line? Is one of your company's or organization's main fallback solutions to simply charge customers more?
Fiscal responsibility is everyone's responsibility, now more than ever.
VP and Editor in Chief
To find out more about Rob Preston, please visit his page.